SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the quarterly period ended September 30, 2000.
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from ------------ to ---------
Commission file number: 000-29539
FORGOTTEN INVESTMENT COMPANY, INC.
--------------------------------------
(Exact name of small business issuer as specified in its charter)
Nevada 86-0972708
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5505 N. Indian Trail, Tucson, Arizona 85750
-------------------------------------------
(Address of principal executive office) (Zip Code)
(520) 577-1516
----------------------
(Issuer's telephone number)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes XX No
-- --
The number of outstanding shares of the issuer's common stock, $0.001 par
value, as of November 6, 2000 was 1,000,000.
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TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
<S> <C>
ITEM 1. FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . 3
Condensed Balance Sheets as of December 31, 1999
and September 30, 2000 . . . . . .. . . . . . . . . . . . . 5
Condensed Statements of Operations
for the Three and Nine Month Periods Ended
September 30, 2000 and 1999 . . . . . . . . . . . . . . . . . 6
Condensed Statements of Cash Flows
for the Nine Month Periods Ended
September 30, 2000 and 1999 . . . . . . . . . . . . . . . . 7
Notes to Unaudited Condensed Financial Statements . . . . . . 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS . . . . . . . . . 10
PART II - OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . 12
ITEM 2 CHANGES IN SECURITIES . . . . . . . . . . . . . . . . . 12
ITEM 5 OTHER INFORMATION . . . . . . . . . . . . . . . . . . . 12
INDEX TO EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . 13
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PART I
ITEM 1. FINANCIAL STATEMENTS
As used herein, the term "Company" refers to Forgotten Investment Company,
Inc., a Nevada corporation, and its subsidiaries and predecessors unless
otherwise indicated. Unaudited, condensed interim financial statements
including a balance sheet for the Company as of the quarter ended September 30,
2000 and statements of operations and statements of cash flows for the interim
period up to the date of such balance sheet and the comparable period of the
preceding year.
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INDEPENDENT ACCOUNTANTS' REPORT
Forgotten Investment Company, Inc.
(A Development Stage Company)
We have reviewed the accompanying balance sheets of Forgotten Investment
Company, Inc. (a development stage company) as of September 30, 2000 and
December 31, 1999, and the related statements of operations for the three and
nine month periods ended September 30, 2000 and 1999, and cash flows for the
nine month periods ended September 30, 2000 and 1999. These financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of which
is the expression of an opinion regarding the financial statement taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements for them to be in
conformity with generally accepted accounting principles.
Respectfully submitted
/s/ Robison, Hill & Co.
-----------------------------
Certified Public Accountants
Salt Lake City, Utah
November 3, 2000
4
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<CAPTION>
FORGOTTEN INVESTMENT COMPANY, INC.
----------------------------------
(A Development Stage Company)
-----------------------------
BALANCE SHEETS
--------------
September 30, December 31,
2000 1999
--------------- --------------
<S> <C> <C>
ASSETS: $ - $ -
=============== ==============
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $ 312 $ -
=============== ==============
Total Liabilities
Stockholders' Equity:
Common Stock, Par value $.001
Authorized 100,000,000 shares,
Issued 1,000,000 Shares at September 30, 2000
and December 31, 1999 1,000 1,000
Paid-In Capital 1,325 350
Retained Deficit (1,200) (1,200)
Deficit Accumulated During the
Development Stage (1,437) (150)
--------------- --------------
Total Stockholders' Equity (312) -
--------------- --------------
Total Liabilities and
Stockholders' Equity $ - $ -
=============== ==============
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See accompanying notes and accountants' report.
5
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<CAPTION>
FORGOTTEN INVESTMENT COMPANY, INC.
----------------------------------
(A Development Stage Company)
-----------------------------
STATEMENTS OF OPERATIONS
------------------------
Cumulative
since October
For the For the 20,1999
Three Months Nine Months Inception of
Ended Ended Development
September 30, September 30, Stage
------------- --------------- -------------
2000 1999 2000 1999
------ ----- -------- -----
<S> <C> <C> <C> <C> <C>
Revenues $ - $ - $ - $ - $ -
------ ----- -------- -----
Expenses
General and Administrative 352 - 1,287 - 1,437
------ ----- -------- ----- -------------
Net Loss $(352) $ - $(1,287) $ - $ (1,437)
====== ===== ======== ===== =============
Basic & Diluted loss per share $ - $ - $ $ -
====== ===== ======== =====
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See accompanying notes and accountants' report.
6
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<CAPTION>
FORGOTTEN INVESTMENT COMPANY, INC.
----------------------------------
(A Development Stage Company)
-----------------------------
STATEMENTS OF CASH FLOWS
------------------------
Cumulative
Since October
For the nine months ended 20, 1999
September 30, Inception of
------------------------- Development
2000 1999 Stage
------------ ----------- -------------
CASH FLOWS FROM OPERATING
-------------------------
ACTIVITIES:
-----------
<S> <C> <C> <C>
Net Loss $ (1,287) $ - $ (1,437)
Increase (Decrease) in Accounts Payable 312 - (112)
------------ ----------- -------------
Net Cash Used in operating activities (975) - (1,325)
------------ ----------- -------------
CASH FLOWS FROM INVESTING
-------------------------
ACTIVITIES:
-----------
Net cash provided by investing activities - - -
------------ ----------- -------------
CASH FLOWS FROM FINANCING
-------------------------
ACTIVITIES:
-----------
Capital contributed by shareholder 975 - 1,325
------------ ----------- -------------
Net Cash Provided by
Financing Activities 975 - 1,325
------------ ----------- -------------
Net (Decrease) Increase in
Cash and Cash Equivalents - - -
Cash and Cash Equivalents
at Beginning of Period - - -
------------ ----------- -------------
Cash and Cash Equivalents
at End of Period $ - $ - $ -
============ =========== =============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
-------------------------------------------------
Cash paid during the year for:
Interest $ - $ - $ -
Franchise and income taxes $ - $ - $ 75
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SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: None
-------------------------------------------------------------- -----------
See accompanying notes and accountants' report.
7
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FORGOTTEN INVESTMENT COMPANY, INC.
-----------------------------------
(A Development Stage Company)
------------------------------
NOTES TO FINANCIAL STATEMENTS
------------------------------
FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2000 AND 1999
-----------------------------------------------------------------------
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------------------------------------------
This summary of accounting policies for Forgotten Investment Company, Inc.
is presented to assist in understanding the Company's financial statements. The
accounting policies conform to generally accepted accounting principles and have
been consistently applied in the preparation of the financial statements.
The unaudited financial statements as of September 30, 2000 and for the
three and nine months then ended reflect, in the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
fairly state the financial position and results of operations for the three and
nine months. Operating results for interim periods are not necessarily
indicative of the results which can be expected for full years.
Organization and Basis of Presentation
-------------------------------------------
The Company was incorporated under the laws of the State of Nevada on June
19, 1997. The Company ceased all operating activities during the period from
June 19, 1997 to October 20, 1999 and was considered dormant. Since October 20,
1999, the Company is in the development stage, and has not commenced planned
principal operations.
Nature of Business
---------------------
The Company has no products or services as of September 30, 2000. The
Company was organized as a vehicle to seek merger or acquisition candidates.
The Company intends to acquire interests in various business opportunities,
which in the opinion of management will provide a profit to the Company.
Cash and Cash Equivalents
-----------------------------
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.
Pervasiveness of Estimates
-----------------------------
The preparation of financial statements in conformity with generally
accepted accounting principles required management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Loss per Share
-----------------
The reconciliations of the numerators and denominators of the basic loss
per share computations are as follows:
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FORGOTTEN INVESTMENT COMPANY, INC.
----------------------------------
(A Development Stage Company)
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2000 AND 1999
----------------------------------------------------------------------
(Continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
-----------------------------------------------------------------------------
(Continued)
Income Shares Per-Share
------------ ------------- Amount
(Numerator) (Denominator) -----------
<S> <C> <C> <C>
For the three months ended September 30, 2000
---------------------------------------------
BASIC & DILUTED LOSS PER SHARE
Loss to common shareholders $ (352) 1,000,000 $ -
============ ============= ===========
For the nine months ended September 30, 2000
BASIC & DILUTED LOSS PER SHARE
Loss to common shareholders $ (1,287) 1,000,000 $ -
============ ============= ===========
For the three months ended September 30, 1999
BASIC & DILUTED LOSS PER SHARE
Loss to common shareholders $ - 1,000,000 $ -
============ ============= ===========
For the nine months ended September 30, 1999
BASIC & DILUTED LOSS PER SHARE
Loss to common shareholders $ - 1,000,000 $ -
============ ============= ===========
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The effect of outstanding stock equivalents are anti-dilutive for
September 30, 2000 and 1999 and are thus not considered.
Reclassification
-----------------
Certain reclassifications have been made in the 1999 financial statements
to conform with the September 30, 2000 presentation.
NOTE 2 - INCOME TAXES
--------------------------
As of September 30, 2000, the Company has a net operating loss
carryforward for income tax reporting purposes of approximately $2,000 that may
be offset against future taxable income through 2011. Current tax laws limit
the amount of loss available to be offset against future taxable income when a
substantial change in ownership occurs. Therefore, the amount available to
offset future taxable income may be limited. No tax benefit has been reported
in the financial statements, because the Company believes there is a 50% or
greater change the carry-forwards will expire unused. Accordingly, the
potential tax benefits of the loss carry-forwards are offset by a valuation
allowance of the same amount.
NOTE 3 - DEVELOPMENT STAGE COMPANY
----------------------------------------
The Company has not begun principal operations and as is common with a
development stage company, the Company has had recurring losses during its
development stage.
9
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FORGOTTEN INVESTMENT COMPANY, INC.
-----------------------------------
(A Development Stage Company)
------------------------------
NOTES TO FINANCIAL STATEMENTS
------------------------------
FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2000 AND 1999
-----------------------------------------------------------------------
(Continued)
NOTE 4 - COMMITMENTS
------------------------
As of September 30, 2000 all activities of the Company have been conducted
by corporate officers from either their homes or business offices. Currently,
there are no outstanding debts owed by the Company for the use of these
facilities and there are no commitments for future use of the facilities.
NOTE 5 - STOCK SPLIT
-------------------------
On October 20, 1999 the Board of Directors authorized 1,000 to 1 stock
split, changed the authorized number of shares to 100,000,000 shares and the par
value to $.001 for the Company's common stock. As a result of the split,
999,000 shares were issued. All references in the accompanying financial
statements to the number of common shares and per-share amounts for 1999 have
been restated to reflect the stock split.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This Quarterly Report contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which are intended to be
covered by the safe harbors created thereby. Investors are cautioned that all
forward-looking statements involve risks and uncertainty, including without
limitation, the ability of the Company to continue its expansion strategy,
changes in costs of raw materials, labor, and employee benefits, as well as
general market conditions, competition and pricing. Although the Company
believes that the assumptions underlying the forward-looking statements
contained herein are reasonable, any of the assumptions could be inaccurate, and
therefore, there can be no assurance that the forward-looking statements
included in this Quarterly Report will prove to be accurate. In light of the
significant uncertainties inherent in the forward-looking statements including
herein, the inclusion of such information should not be regarded as are
presentation by the Company or any other person that the objectives and plans of
the Company will be achieved.
As used herein the term "Company" refers to Forgotten Investment Company, Inc.,
a Nevada corporation and its predecessors, unless the context indicates
otherwise. The Company is currently a shell company whose purpose is to acquire
operations through an acquisition or merger or to begin its own start-up
business.
The Company is in the process of attempting to identify and acquire a favorable
business opportunity. The Company has reviewed and evaluated a number of
business ventures for possible acquisition or participation by the Company. The
Company has not entered into any agreement, nor does it have any commitment or
understanding to enter into or become engaged in a transaction as of the date of
this filing. The Company continues to investigate, review, and evaluate
business opportunities as they become available and will seek to acquire or
become engaged in business opportunities at such time as specific opportunities
warrant.
10
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Results of Operations
The Company had no sales or sales revenues for the three and nine months ended
September 30, 2000 or 1999 because it is a shell company that has not had any
business operations for the past three years.
The Company had no costs of sales revenues for the three and nine months ended
September 30, 2000 or 1999 because it is a shell company that has not had any
business operations for the past three years. The Company had $352 and $1,287
in general and administrative expenses for the three and nine month periods
ended September 30, 2000 and $0 for the same periods in 1999.
The Company recorded net loss of $352 and $1,287 for the three and nine months
ended September 30, 2000 compared to $0 loss for the same periods in 1999.
Capital Resources and Liquidity
At September 30, 2000, the Company had total current assets of $0 and total
assets of $0 as compared to $0 current assets and $0 total assets at December
31, 1999. The Company had a net working capital deficit of $312 and $0 at
September 30, 2000 and December 31, 1999.
Net stockholders' deficit in the Company was $312 and $0 as of September 30,
2000 and December 31, 1999.
11
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PART II-OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None/Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
None/Not Applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
(a) Exhibits. Exhibits required to be attached by Item 601 of Regulation
S-B are listed in the Index to Exhibits on page 14 of this Form 10-QSB,
and are incorporated herein by reference.
(b) Reports on Form 8-K. No reports on Form 8-K were filed during the
period covered by this Form 10-QSB.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, this 6th day of November, 2000.
Forgotten Investment Company, Inc.
/s/ Daniel L. Hodges
---------------------------
Daniel L. Hodges August 9, 2000
President/CFO and Director
12
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EXHIBIT INDEX
Exhibit No. Page No. Description
27 14 Financial Data Schedule "CE"
13
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